Why the rule of law matters for human flourishing

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In our efforts to reduce poverty, spur economic growth, and cultivate the conditions for human flourishing, the conversation can quickly be consumed with debates over material wealth and the allocation of physical resources.

Yet economists are increasingly recognizing the role “intangible assets” — unseen forces that propel humans toward increased innovation and collaboration. These include a range of underlying features, from basic honesty and virtue to the cultural appetite for risk and experimentation. But one of the most prominent has to do with the rule of law.

“Rule of law is essential if you want to have a functioning economy,” says Samuel Gregg in the PovertyCure series. “You cannot have a functioning economy without secure property rights. You cannot have a functioning economy unless contracts are enforced. You cannot have a functioning economy if government officials can act in an arbitrary fashion.”

Indeed, as the following excerpt explains, a society can have the right people with the right skills and the right tangible goods and materials, but if individuals lack things like property rights, fair rules, access to courts, and access to markets, economic activity will fizzle as social frustration climbs.

“Try and imagine a football match without rules,” says economist Hernando De Soto. “…The rules are crucial to get that game going. But everyone knows how to drive a ball. Everybody knows how to buy and sell, so there is plenty of entrepreneurship in the world. The problem is the rules. In two-thirds of the world, there isn’t yet the rule of law.”

Elsewhere in the series, we see a prime example of this in La Cava, a shantytown in Buenos Aires:

“Sometimes the physical differences between rich and poor neighborhoods are so palpable that it’s easy to miss an immaterial difference,” says Michael Miller.

Such differences don’t only end with mere economic frustration, just as the primary reason for having the rule of law isn’t it’s economic magic. Societies that lack fair rules and universal access and justice do a deeper damage and disservice to the human person, material poverty aside.

As Gregg has written elsewhere, rule of law is morally grounded in a foundation of freedom and reason. Those who thrive in societies with the rule of law aren’t just thriving because they enjoy greater economic prosperity. They’re thriving because they are, fundamentally, free:

At the core of the rule of law’s reliance upon preceding commitments to goods such as freedom and reason is another key revelation: we expect the law’s internal workings to be underpinned by reason and to facilitate human freedom because we think there is something distinct about all human beings that makes them worthy (dignus) of such treatment. That should also remind us why we want as many people as possible to escape the material poverty that attracts our sympathy.

It shouldn’t be simply because we don’t want people to suffer. Though that’s important, our commitment to fighting poverty should also reflect a conviction that human beings are free, do possess reason, and are therefore capable of flourishing, including in the economy. Neither the rule of law nor economic prosperity will solve every social problem. But just as a commitment to the rule of law…reflects a moral investment in legal systems that “fit” the truth that humans are rational and free people, so too should any effort to reduce material poverty flow from that same truth.

As we reflect on “intangible assets” such as these, let’s remember that the lessons they offer aren’t just necessary for the sake of economic prosperity. If we hope to achieve whole-life, civilizational prosperity that endures, those basic moral foundations are absolutely essential.

is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, The Christian Post, The Stream, Intellectual Takeout, Foundation for Economic Education, Patheos, LifeSiteNews, The City, Charisma News, The Green Room, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.